Friday, February 22, 2013

This Week in Bank Failures

Banks cutting jobs and selling off assets. Austerity budgets and anti-austerity protests. Sovereign downgrades. Tinkering with monetary policy. This was just another week.

Perhaps the situation in Argentina is emblematic of the larger state of things. A corrupt government is systematically looting the nation’s wealth, while people stand around and argue over the details. Argentina is talking about invading a foreign archipelago again.Whenever Argentina goes to war it leads to financial disaster for the country, the kind of utter disaster that wipes out all of the country’s currency. It is always a long road back, almost a full generation before things are relatively tolerable again.

It is such a familiar pattern we expect it to repeat. We can almost plan on it. Yet there is no guarantee of that. One of these times, perhaps this time, Argentina may get in such a scrape that it does not come back in a generation. Argentina could almost as easily fall into such destitution that it goes on for five generations, or seven, or for so long that by the time things get better, there is no Argentina anymore.

These days, these are the chances people seem mostly willing to take.

A Michigan credit union with 158 members, Amez United Credit Union in Detroit, closed this week. The NCUA is sending checks to the members for their insured deposits.